| July 31
July 31 Weatherford International Ltd
has abandoned its ambitions to sell a wide variety of services
across the oilfield spectrum, and is instead sharpening its
focus on what makes the most money.
The company's chief executive, Bernard Duroc-Danner, on
Wednesday attached firm numbers to his long-touted plan to
shrink the company to a workable size. Of $16 billion in
anticipated revenue for 2013, only $11 billion is core, he said.
"Separating the non-core from our company is just a question
of time and methodical execution," Duroc-Danner said. Until
March of this year, Duroc-Danner said, he and his team had
focused on nothing beyond overcoming accounting troubles that
are now largely behind them..
There has been a push in recent years by oilfield service
leaders Schlumberger Ltd, Halliburton Co and
Baker Hughes Inc to capture a larger share of the
spending on oil and gas wells. Weatherford is now sticking to
its most profitable niches instead.
Weatherford had said previously that it planned about $1
billion worth of asset sales this year, and Duroc-Danner hoped
two transactions would be done in the fourth quarter. One of the
sales was not completed because the buyer pulled out, he added.
Next year, another four smaller product lines would be sold,
Duroc-Danner said on a conference call to discuss second-quarter
"All of these businesses, which are legitimate and have
strengths in and of their own, we are probably the wrong owner,"
Duroc-Danner said. "And our core, on the contrary, we are the
The $11 billion in core revenue broke down between well
construction, formation evaluation, completion and production.
"The company has evolved from one driven by top line (and
bottom line) growth and one focused on taking on the big 3 oil
service companies to a much more concentrated company - one that
is focused on its competitive strengths," Cowen analyst Jim
Crandell said in a note to clients on Wednesday.
This marks a reversal for Duroc-Danner, who became CEO in
1990 at a company called Energy Ventures, which merged with
Weatherford Enterra takeover in 1998, took on the new name and
went on a three-year spree that swallowed 20 firms.
Weatherford is also pulling out of the unprofitable southern
Iraq region, while at a company-wide level it is hacking away at
its payroll after headcount rose by 15,000 to 70,000 in two
years. That compares with 73,000 employees at Halliburton, which
has a stock market value four times greater than Weatherford.
A reduction of 3,000 employees would save $90 million
annually, or two cents per quarter, starting in the fourth
quarter, Duroc-Danner said, with full-year earnings expected to
be 88 to 92 cents per share - ahead of most analysts' estimates.
Weatherford shares rose 1.5 percent to $13.96 on Wednesday
in New York trading.